GOLD is the﻿ money of the KINGS, SILVER is the money of the GENTLEMEN, BARTER is the money of the PEASANTS, but DEBT is the money of the SLAVES!!!

Saturday, July 20, 2013

Gold Standard? China reportedly planning to back the Yuan with Gold

According to media reports of early July, the People's Bank of China is
mulling the possibility of phasing out the dollar as the reference
currency for the yuan exchange rate, and to start using gold as the
reference point.The reports have not been confirmed officially, but
analysts are warning that the step, if taken, will weaken the yuan and
destabilise China's already troubled economy, ultimately provoking a new
bout of the economic crisis worldwide.Beijing's possible move to
back the yuan with gold would not be meant as a strategic measure to
strengthen the national currency and increase its attractiveness as an
investment medium. Rather, it would be a flaunt aimed at demonstrating
to the world (and to the USA in particular) that China is capable of
taking the risks associated with a departure from the dollar standard.
Experts warn however that, apart from benefiting no-one, such a decision
may actually have catastrophic consequences.

Separating the yuan
exchange rate from the US dollar may further weaken the American
currency in the long run; in addition, China's monetary policy would
become very much restricted, believes Evgeny Nadorshin, chief economist
at AFK Sistema."The yuan will start fluctuating severely against the
dollar and other major reserve currencies. This will affect the Chinese
economy, which currently has serious problems as it is: the export
revenues are falling, and the statistics for freight traffic and
electricity consumption indicate a significant slowdown in business
activity," says Aleksandr Golovtsov, head of the research department at
UralSib Asset Management.

Possible effect on RussiaWhen it
comes to discussing possible consequences for Russia however, opinions
differ. Aleksandr Osin, chief economist at Finam Management, actually
believes Moscow could benefit from a gold-backed yuan because this would
help Russia in its economic relations with China.

On the other
hand, the greatest danger to Russia being highlighted by most experts
would be an increase in competition from Chinese commodities, which will
be offered more aggressively in the export market due to the shrinking
of domestic demand. "China's demand for Russian raw materials, in
particular for crude oil, metals and fertilisers, will be growing at a
slower pace [than is currently the case]," Golovtsov notes.Read more: http://rbth.asia/business/2013/07/17/...